Reiterate Buy as order momentum remains strong

Research evidence excerpt

Accessible version

Leonardo

Reiterate Buy as order momentum remains

strong

Reiterate Rating: BUY | PO: 79.50 EUR | Price: 55.12 EUR

Reiterate Buy. PO unchanged. Raise EPS +2%.

03 August 2026

We reiterate our Buy rating on Leonardo following H1'26 results. Our EPS forecasts

increase by +2% across 2026-30 and our sum-of-the-parts derived PO remains

unchanged at €79.5. Our 2026 forecasts are c.3% ahead of upgraded revenue and EBITA

guidance. At 9.5x 2028E EV/EBIT, we believe the shares fail to reflect the mid-teens

EBIT CAGR we expect over 2026-30. Leonardo also reiterated its intention to conclude

discussions with an industrial partner for Aerostructures by year-end, which we continue

to view as an important catalyst for the shares.

Equity

Strong order momentum, FY’26 guidance upgraded

Leonardo reported a solid Q2, with revenues 1% ahead of consensus and EBITA 5%

above expectations. The standout was orders, which exceeded consensus by 24%. At

divisional level, Defence Electronics was the key driver of the beat, with revenues 6%

ahead of consensus and EBITA 9% above expectations, supported by margins 40bps

ahead of forecasts. Aircraft revenues underperformed, missing consensus by 13%,

although profitability proved resilient, with EBITA only 2% below expectations and

margins 150bps ahead of consensus. Management increased FY26 guidance for orders

(+7%), EBITA (+3%) and free operating cash flow (+4%), while leaving revenue guidance

unchanged. The revised outlook now includes the contribution from IDV, which had

previously been excluded. Importantly, upgraded EBITA guidance remains broadly in line

with pre-results consensus expectations.

Key Changes

(EUR)

Previous

Current

2026E Rev (m)

22,762.1

22,938.3

2027E Rev (m)

25,886.3

26,063.4

2026E EPS

2.34

2.37

2027E EPS

2.94

2.98

Benjamin Heelan >>

Research Analyst

Merrill Lynch (DIFC)

David Holmes, CFA >>

Research Analyst

MLI (UK)

Lorenzo Di Patrizi >>

Research Analyst

MLI (UK)

CEO signals continuity & acceleration of industrial plan

Lorenzo Mariani presented for the first time as CEO of Leonardo, emphasizing both

continuity and acceleration of the group's industrial plan. Michelangelo remains a key

…